MACQUARIE Group faces further property headaches after the refusal of banks to roll over nearly $100 million worth of debt for the listed Macquarie DDR Trust, just weeks before the facility is due to be repaid.
The listed fund, which owns mid-sized shopping centres across the US, is scrambling to find alternative funding sources or urgently thrash out options with lenders to extend the loans before they are due to be repaid on March 26.
But this is just the first of the deepening problems for the fund, which is managed by Macquarie Group. It has a combined $US413 million ($A458.4 million) worth of debt due to expire by the middle of next month.
Just last month, Macquarie DDR chief executive Luke Petherbridge warned investors that if the maturing $US87 million worth of loans, known as the Head Trust Loan facility, could not be extended, this would have a ''significant negative impact on our net tangible assets and our ability to continue to operate''.
The six banks behind the Head Trust facility this week advised Macquarie DDR they were not prepared to extend the loans on ''current terms''.
The size of the debt and tight time frame of the debt problems have sparked speculation that the parent company may be forced to step in to help with the debt restructuring.
Macquarie DDR is chaired by the head of Macquarie's banking arm, Richard Sheppard. Former Westpac chief executive Bob Joss is also a board member.
Talks are continuing on the remaining short-term debt, with $US145.1 million due to expire on April 5.
A further $US268 million facility is due to expire on April 13, although this is secured by 10 assets.
Macquarie DDR said yesterday that if the talks were successful, the trust would have greater flexibility to sell off assets over the long term and use existing cash flow to repay debt. ''However, there can be no assurance given that a successful outcome will be negotiated,'' Macquarie DDR said in a statement yesterday.
Mr Petherbridge said recently that Macquarie DDR was working on further asset sales, but pricing had fallen below expectations.
He cautioned investors that selling off shopping centres at this point of the cycle would not be in the best interests of shareholders or creditors.
Macquarie DDR has total assets of $1.7 billion, although gearing - that is, debt-to-equity levels - is running at 76 per cent. The fund is capitalised at $62 million.
